Daily Digest – January 7: Lies, Damn Lies, and Entitlement Reform

There’s a growing consensus in Washington that we need to “reform” entitlements (in the same way that an axe reforms a tree) in order to rein in the deficit, but as Reich explains, that’s because it’s the easy answer, not the one that stands up to any scrutiny.

Paul Krugman felt deja vu at the annual meeting of the American Economic Association, which is still focused on an economic crisis prolonged by ignorance of its own solutions. Future panel suggestion: what can we learn from our failure to learn anything?

David Callahan writes that the latest jobs report shows the U.S. shed 89,000 public sector workers in the last three months of 2012, many of them teachers. Because in these tough economic times, we don’t have money to waste on educating our future workforce.

The next stage of the ‘fiscal cliff’ fight has officially begun (WaPo)

Suzy Khimm notes that both sides are already positioning themselves for the debt ceiling/sequester battle, and while Democrats want more revenue from tax reform, Republicans have had enough of taxes and want to focus on spending cuts now. And forever.

Why Corporate Subsidies in the Fiscal Cliff Bill Matter: We Can Stop Corruption If We Understand It (Naked Capitalism)

Roosevelt Institute Fellow Matt Stoller writes that his exposé on tax extenders has drawn media attention and outrage from the parties involved, because: a) the Founding Fathers would have wanted us to pay for Transformers and b) you weren’t supposed to know about it.

Matt Taibbi argues that the Wall Street bailout was built on a series of increasingly elaborate lies and has helped create a financial system that’s sustained not by producing any real value, but by manufacturing enough wool to keep taxpayers’ eyes covered.

Gretchen Morgenson notes that regulators are close to a $10 billion settlement with 14 banks accused of foreclosure abuses, which would skip the messy business of investigating those abuses and determining how much borrowers are actually owed.

Jessica Silver-Greenberg and Susanne Craig write that even in the wake of several high-profile Ponzi schemes and efforts to ramp up oversight, it’s still hard to know for sure whether giving your money to a broker is a safer bet than putting it through a shredder.

NND Editor Bryce Covert responds to a recent New York Times profile of low-income women struggling with college, noting that their boyfriend troubles wouldn’t be such an issue if soaring costs and inequality didn’t force them to rely on a man-sized safety net.

Greg Kaufmann rounds up some of the most cogent responses to his piece defending the fiscal cliff deal as a net positive for low-income Americans, including some that disagree with him. Doesn’t he know those go in the “unserious hippies” bin?